European Parliament resolution of 4 February 2014 on the local and regional consequences of the development of smart grids (2013/2128(INI))

The European Parliament,

– having regard to Articles 174, 175, 176, 177, 178, 191 of the Treaty on the Functioning of the European Union,

– having regard to Article 37 of the Charter of Fundamental Rights of the European Union,

– having regard to the Protocol 26 of the TFEU,

– having regard to the Commission Communication of 3 March 2010 entitled ‘Europe 2020: A strategy for smart, sustainable and inclusive growth’ (COM(2010)2020),

– having regard to Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006(1)
,

– having regard to Regulation (EU) No 1301/2013 of the European Parliament and of the Council of 17 December 2013 on the European Regional Development Fund and on specific provisions concerning the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006(2)
,

– having regard to Regulation (EU) No 1300/2013 of the European Parliament and of the Council of 17 December 2013 on the Cohesion Fund and repealing Council Regulation (EC) No 1084/2006(3)
,

– having regard to Regulation (EU) No 1298/2013 of the European Parliament and of the Council of 11 December 2013 amending Council Regulation (EC) No 1083/2006 as regards the financial allocation for certain Member States from the European Social Fund(4)
,

– having regard to Regulation (EU) No 1299/2013 of the European Parliament and of the Council of 17 December 2013 on specific provisions for the support from the European Regional Development Fund to the European territorial cooperation goal(5)
,

– having regard to Regulation (EU) No 1302/2013 of the European Parliament and of the Council of 17 December 2013 amending Regulation (EC) No 1082/2006 on a European grouping of territorial cooperation (EGTC) as regards the clarification, simplification and improvement of the establishment and functioning of such groupings(6)
,

– having regard to Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC(7)
,

– having regard to the Community Guidelines on State Aid for Environmental Protection(8)
,

– having regard to Council Regulation (EU) No 734/2013 of 22 July 2013 amending Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty(9)
,

– having regard to the Commission Communication ‘EU Guidelines for the application of State aid rules in relation to the rapid deployment of broadband networks(10)
‘,

– having regard to the Commission Communication of 12 April 2011 entitled ‘Smart Grids: from innovation to deployment’ (COM(2011)0202),

– having regard to Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC(11)
,

– having regard to Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC(12)
,

– having regard to the Commission Communication of 8 March 2011 entitled ‘A Roadmap for moving to a competitive low carbon economy in 2050’ (COM(2011)0112),

– having regard to the Commission Communication of 15 November 2012 entitled ‘Making the internal energy market work’ (COM(2012)0663),

– having regard to the Commission Communication of 6 June 2012 entitled ‘Renewable energy: a major player in the European energy market’ (COM(2012)0271),

– having regard to the Commission’s Green Paper of 27 March 2013 entitled ‘A 2030 framework for climate and energy policies’ (COM(2013)0169),

– having regard to its resolution of 12 September 2013 on microgeneration – small-scale electricity and heat generation(13)
,

– having regard to its resolution of 16 January 2013 on the role of EU cohesion policy and its actors in implementing the new European energy policy,(14)

– having regard to its resolution of 10 September 2013 on the implementation and impact of the energy efficiency measures under Cohesion Policy(15)
,

– having regard to the proposal for a Regulation of the European Parliament and of the Council of 25 January 2012 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation) (COM(2012)0011),

– having regard to the Commission Staff Working Document of 14 November 2008 entitled ‘Regions 2020: An assessment of future challenges for EU Regions’ (SEC(2008)2868),

– having regard to the Commission Communication of 6 October 2010 entitled ‘Regional Policy contributing to smart growth in Europe 2020’ (COM(2010)0553),

– having regard to the consultation document containing draft Commission Regulation (EU) No .../.. of XXX declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty,

– having regard to Rule 48 of its Rules of Procedure,

– having regard to the report of the Committee on Regional Development and the opinion of the Committee on Industry, Research and Energy (A7-0019/2014),

A. whereas a number of best practice examples, such as the Burgenland region, the ‘MaRes’ (Macaronesia Research Strategy) project and the ‘Green Islands project’, the Energy Valley in the Netherlands, the regenerative model region of Harz in Germany, Hostětín in the Czech Republic, the Orkney Micro Renewables project in Scotland, as well as pilot project cities and communities under the Commission’s CONCERTO initiative or the CO-POWER initiative for the efficient use of energy and decentralised energy production show that local communities and citizens can become ‘prosumers’, producing for their own energy needs while also selling energy to the grid or receiving credit for their surplus electricity and making use of net metering, operating in virtual power plants together with other actors, achieving maximum benefits by including all actors in the planning and implementation of regional actions, fostering active participation and information exchange, and developing a holistic approach by including other energy-related sectors such as transport and housing, using intelligent financial support mechanisms and creating new jobs;

B. whereas Parliament has adopted reports on the role of EU Cohesion Policy and its actors in implementing the new European energy policy and on the implementation and impact of the energy efficiency measures under the Cohesion Policy;

C. whereas the personal data collected in connection with the operation of smart energy systems are highly sensitive, since they can be used to gain an insight into consumer behaviour, and whereas special protection of this data must therefore be guaranteed;

New opportunities for the regional economy

1. Welcomes a paradigm shift for the regions in the way energy is produced and consumed, moving from an inflexible traditional model, which functions on a ‘base load logic’, to variable, decentralised and local production, integrating a high share of small-scale renewable energy with flexible and responsive demand and distributed storage; recognises that in order to preserve sustainable development and to meet the requirements of future demands, new models of energy production and consumption based on decentralised and local production should be promoted; stresses the fact that a smart grid is essential for such a paradigm shift and that smart grid implementation should be embedded in a cross-sectoral and comprehensive approach to regional development in order to maximise benefits and market opportunities for the regions as well as to achieve sustainability, growth and innovation;

2. Points out that many European regions have pursued projects within the existing EU framework which have both fostered synergies in selected areas and promoted energy sustainability and renewables, and where public and private partners join efforts to explore regional growth opportunities in the energy sector, through the early take-up of the European Structural and Investment Funds (ESIF), targeted partnerships at local, regional, national and European level, and effective, decentralised implementation strategies for the exploitation of local energy resources;

3. Underlines the numerous benefits of smart grids in terms of lowering greenhouse gas emissions, increasing the share of renewable energy and distributed generation, ensuring the security of supply to households, creating the conditions required for the efficient use of electricity in transport, giving consumers the ability to adapt their consumption in order to benefit from the lowest prices and at the same time save energy, improving energy efficiency, saving electrical power, reducing costly investments in electricity grids by using energy outside peak periods, boosting EU technology innovation and development; stresses the need for citizen involvement at every stage including the deployment of advanced metering infrastructure that provides a two-way flow of information, also in activities planned by the distribution system operators (DSOs) and providers of smart grid technologies; points out, also, that the development and use of smart grids greatly reduces energy loss during transmission and distribution; highlights that automatic grid reconfiguration can be used to prevent or restore outages owing to its self-healing capabilities; notes, however, that national support systems in various regions often do not prioritise the most effective means of applying renewable technologies for private households;

4. Highlights, in this context, the opportunities for geographical (or territorial) changes to the energy grid and the promotion of smart grids for disadvantaged regions, including outermost, peripheral and island regions, which can develop from energy consumers into energy producers, obtaining high economic and competitive benefits while ensuring a secure energy supply and the deployment and operation of smart grids; notes that the deployment and operation of smart grids, in particular, offer opportunities to these regions, which can reduce the energy costs that they incur;

5. Points out that grid infrastructure, grid management and market regulations are currently geared towards the needs and possibilities of nuclear and fossil-fuel power stations and thus represent a competitive disadvantage for new technologies such as renewable energies;

6. Calls on Member States and regional and local authorities to invest as early as possible in local smart grids by thoroughly considering boosting investments using the ESIF, including financial instruments to leverage private investment, taking into account the environmental, economic, social and territorial needs of the specific regions and their specificities, given that there is no single solution for all regions; calls for a flexible approach at local and regional level to reduce the barriers to combining measures for energy production, storage, including across borders, and efficiency, and to work with other sectors such as information and communications technology (ICT) and transport; stresses in this regard the importance of pumped storage associated with the exploitation of renewable energy sources;

7. Stresses that the deployment of smart grids requires a stable, long-term policy framework; calls on the Commission to propose ambitious strategies, policies and targets for 2030 for energy efficiency and renewable energies as well as for greenhouse gas emissions, in order to give future certainty to investors and interconnected industries and to facilitate a smart energy system;

8. Recalls that in most Energy Roadmap 2050 scenarios the proper integration of distributed renewable generation will be unfeasible without the development of local and regional smart distribution network grids for electricity, particularly given that they generate information links and electricity supply links between local socioeconomic development areas, allowing flexible management and necessary back-up for those variable energy sources; calls, therefore, for greater importance to be attached to the distribution networks; stresses, however, that the development of smart grids relates to the efficient transporting of energy from the site of production to the site of final use; points out, furthermore, that the added value of smart grids becomes even greater as they communicate on a wider scale, for example at national or even European level, and controlling electricity demand on this scale, by spreading the demand, provides further opportunities for the elimination of consumption (consumption sources) when local production is too low (or too high);

9. Calls for a more flexible approach in EU regulations and directives on the internal market to reduce barriers to region-specific solutions in terms of energy production, supply, storage and efficiency measures and the combination of such measures, including public‑private partnerships and cross‑border projects;

Smart energy systems

10. Stresses that in order for smart grids to be successfully implemented, a strategy for regions and local communities aimed at ‘smart energy systems’ should be developed, with smart grids becoming part of the regional energy system and integrating a high share of energy from renewable sources, including decentralised generation capacities, combined with demand-side management, energy efficiency measures, the increase of energy savings, smart storage solutions, the transport sector (e-transport) and increased exchange with neighbouring networks;

11. Notes the role that smart meters have in enabling two-way communication, allowing for accurate billing for consumers and increasing demand-side participation, where consumers adjust their habits according to peaks and troughs in energy production; stresses that citizens should receive the full benefits of a smart energy system and that citizen ownership increases behavioural efficiency and thus overall greater energy saving through open protocols; highlights the responsibility of DSOs as service providers to local, regional or national authorities to guarantee access to this service of general interest for all by ensuring network security and stability; highlights that every citizen should have direct access to consumption and production data in order to ensure efficient, safe and secure smart grid operations; urges the Commission to take steps to ensure that electrical appliances (in particular washing machines, dishwashers, heat pumps and storage heaters, etc.) are capable of operating automatically in conjunction with smart meters by providing consumers with the most favourable tariffs;

12. Calls on the Commission, and its Smart Grid Task Force, to update and expand its existing definition of smart grids to include the smart energy system; calls on local and regional authorities to manage energy consumption and load-shedding and work on and adopt regional strategies based around a smart energy system;

13. Emphasises that in order to ensure the economic efficiency of smart grids for regions it is necessary to combine direct and indirect advantages, linking the energy sector with several other sectors, particularly housing and transport, but also the environment, urban planning, social inclusion, waste management, and the construction sector, in order to achieve energy saving targets while at the same time maximising economic benefits and balancing a region’s energy supply and demand;

14. Calls for innovation and greater investment in the ICT sector in order to overcome the main challenges facing smart technologies, which include the interoperability of technologies with the existing network, as well as regulatory challenges; calls on the Commission and national and regional actors to create positive regulatory and investment frameworks to allow the development of interoperable ICT solutions;

Positive impacts on local employment

15. Encourages all regions and local authorities to consider the advantages of and to invest in smart energy systems as a potential source of local green and sustainable jobs; highlights that the construction industry is one of the main areas where jobs will be created, not only through direct investments in smart energy grids, but also through boosting EU technology development, innovation and the competitiveness of small and medium-sized enterprises (SMEs), investments in energy efficiency measures and renovations, for instance in the housing sector, and through adapting to new technological solutions proposed for the construction of energy-efficient housing;

16. Stresses that the deployment of smart grids also provides an opportunity to boost the competitiveness and worldwide technological leadership of EU technology providers, such as those in the electrical and electronic engineering industry, which consists mostly of SMEs;

17. Calls on all regions to consider investments into skills and training for these new jobs, taking into account the fact that a significant number of new local jobs can also be created in ICT services, the transport sector and sectors that supply smart equipment, infrastructure and services, for instance for new installations, but also to avoid any shortage of specialist labour and enable adaptation to the needs arising from the emergence of new professions in the respective fields; calls on the Member States and regions to support training initiatives both at the academic and the craftsmanship level in the field of renewable energy, such as environmental technical studies and the development of new apprenticeships, for example solateur; highlights that regions which successfully implement a smart energy system can attract further jobs to the region in the form of specialised training through the establishment of technical universities and colleges with expertise in the area; calls on regions to cooperate on smart specialisation and welcomes schemes where knowledge is shared between regions and across borders; draws attention to the initiatives which the EIT is pursuing in the InnoEnergy knowledge and information community (KIC) for the research and development of smart grids and the training of professionals in this sector; draws attention, also, to the new scope for establishing Regional Innovation Schemes;

18. Highlights that public investment in smart energy systems, including through European Structural and Investment Funds (ESIF), can foster local sustainable employment opportunities, create synergy effects and spill-over effects on employment, as well as long-term local benefits for the regions in economic, social and environmental spheres, and can equally be used as an instrument for overcoming economic challenges, especially in regions in crisis-hit countries;

Role of citizens

19. Emphasises that the success of a smart energy system, as shown by studies on best practices and leading examples, is often due to local ownership by individual citizens, a cooperative, a local community or a combination of these actors; recognises that such ownerships increase the acceptance of investments in all elements of smart energy systems; emphasises that citizens should be provided with better information, as well as incentives such as dynamic pricing mechanisms and appropriate ICT tools so that they could be involved at all stages of smart energy infrastructure, production and energy and grid planning distribution;

20. Stresses the importance, given the technical nature of smart grids, of informing and educating users to become informed prosumers who are aware of the opportunities offered by these grids, particularly as regards their link to smart meters; stresses the importance of this awareness-raising being targeted at young people through educational programmes for secondary school pupils and vocational students;

21. Calls on the Commission to remove the barriers and regulatory and legal challenges to local ownership in existing EU legislation, in particular in the state aid rules; invites the Member States to support local energy feed-in possibilities and the sharing of local energy, not only bi-directionally between the grid and the end-user but also cross-border and between end-user units, encouraging local energy production ownership and the sharing of locally produced energy;

22. Stresses that the implementation of smart energy systems will significantly change the private and public spheres, as electricity provision will be linked to data collection and communicated in real time; calls, therefore, for transparent procedures at all levels, involving all actors, including citizens, businesses, industry, local authorities, distribution system operators (DSOs), transmission system operators (TSOs), local and regional dataprotectionofficial
s or ombudsmen and the providers of smart grid technologies;

Data protection and privacy

23. Underlines that smart energy systems will be operated with large amounts of personal data and many profiles and will bear a high risk of data security breaches; emphasises the need for high standards for smart meters in terms of data protection and data privacy, and for enabling citizens to decide upon and control the data which is given to the network operators beyond the absolute minimum of data that is necessary for the provision of energy; notes concerns which relate specifically to the security of smart grid systems and the consumer benefits of smart meters and calls for greater evaluation of this area and further research into data protection and data privacy of smart meters; stresses, therefore, that personal data must be protected, without exceptions, so that it remains protected and secure; stresses, furthermore, that data security must be integrated into smart grid deployment strategies;

24. Stresses the need for improved data protection and privacy regulation and practice when smart metering systems are installed; emphasises that guaranteeing data protection and data privacy for all individuals and households connected to the grid is imperative to the functioning and deployment of smart grids; stresses that data gathered should only be used to ensure the security of electricity supply; calls on Member States to enforce data protection rules while maintaining and developing synergies throughout telecommunications and energy networks and to uphold the rights of individuals in this area; emphasises that in terms of data collection for intelligent energy systems, standards should be developed to ensure that only relevant data is transmitted in order to guarantee the security of electricity supply, to ensure that no data are passed on to third parties, to ensure that customers have the right to inspect and delete the data collected if they are no longer required for the purposes for which they were collected or otherwise processed, and to ensure that citizens retain ownership of their data and have control with respect to the parties to whom they grant access to these data;

25. Asks the Commission to issue further guidance as to the use of personal and non‑personal smart grid data in the light of the revised EU legislation on data protection and the agreed rules on the ownership and management of these data by DSOs, providers or other commercial bodies;

Framework for successful Smart Energy Systems

26. Calls on the Commission to take steps to accelerate smart grid deployment and to focus on the following aspects: stimulating investment and financial incentives in this area, developing technical standards, ensuring data protection for consumers, establishing a regulatory framework to provide incentives for smart grid deployment, guaranteeing an open and competitive retail market in the interest of consumers and providing continued support for innovation in technology and systems;

27. Highlights that under the new ESIF regulations for the period 2014-2020, Member States are obligated to concentrate ESIF resources on investments for a smart, sustainable and inclusive Europe; notes that the minimum share will be set out for regions to concentrate, depending on their level of economic development, at least 20 % of ERDF resources in investment in the energy transition, with much focus on smart grids, the production and distribution of energy derived from renewable sources, energy efficiency, energy savings, cogeneration of heat and energy, and low-carbon strategies, with particular emphasis on urban areas, as well as energy derived from smart grids at the distribution level; underlines the fact that public funding still plays a crucial role in stimulating private investment in smart grid research and development and demonstration projects; points out that the Cohesion Fund also allows for investment in this area; calls on the Member States to make best use of this new opportunity; points out, with regard to investments not covered by compulsory thematic concentration, that the ERDF may also be used to support the development of smart systems for the distribution, storage and transmission of energy and to integrate distributed energy generation from renewable resources;

28. Stresses that the ESI Funds serve as catalysts for investment and that, as several territorial levels are involved in the financing and decision-making process, multi‑level governance plays an important role in successful implementation; welcomes additional funding opportunities within the Intelligent Energy Europe programme;

29. Welcomes the strong emphasis placed on smart energy projects of common interest in the Connecting Europe Facility, while regretting that only two smart grid projects were included in the current two-year list; stresses that smart grid projects at distribution system level must be taken into account; emphasises that infrastructure projects must fulfil sustainability and competitiveness criteria and be underpinned by an integrated approach, which shall be ensured by involving distribution system operators; also underlines the importance of developing north-south energy connections in the Mediterranean;

30. Calls on the Commission to reduce the barriers to investment in smart energy systems, particularly by expanding the exemption within the state aid modernisations (SAM) to allow for public support for all elements of regional and local smart energy systems, including cross-sectoral investments and operations; urges for smart energy systems to be included as a category in the future Commission regulation declaring certain categories of aid compatible with the internal market in the application of Articles 107 and 108 of the Treaty (GBER) and adapting the regulations on other block exemption categories which interact with the development of smart energy systems;

31. Emphasises that interoperability for smart infrastructure is crucial, as regulatory uncertainty and different standards slow down the spread of smart infrastructure; calls, therefore, for greater cooperation between the different European technical standards organisations; highlights that open standards are needed to help interoperability and to accelerate technology development and deployment;

32. Calls on the Commission to take measures to remove the key barriers, such as lack of interoperability and standards (standardised plug and play would reduce costs and allow connectivity also for small Distributed Energy Resources (DERs) (or small DR applications), uncertainty over roles and responsibilities in new smart grid applications, uncertainty over the sharing of costs and benefits and consequently over new business models, consumer resistance to participating in trials; the range of regulatory arrangements in Europe potentially presenting significant barriers to the replicability of project results in different countries;

33. Recalls the 2011 Standardisation Mandate to support European smart grid deployment which was due for completion in 2012; welcomes the progress made under this mandate but stresses that further work is needed; asks that the Commission engage with the standardisation bodies in order to speed up the completion of their work and to issue a new mandate if deemed necessary;

34. Asks Member States to cooperate further and share best practices in the Council of European Energy Regulators (CEER) forum on the regulation of national DSOs; notes, at the same time, the diversity of the organisation of DSOs, with some Member States having a single DSO and others having more than 800; encourages Member States to work together more closely; calls on Member States and the Commission to agree upon a unified classification system to determine whether an organisation is to be deemed a transmission operator, a distribution operator or a combined operator;

35. Calls on the Commission to assess whether it is necessary to bring forward proposals, in line with the third internal energy market package, for the development and promotion of smart grids, which must continue to be guaranteed by means of effective action by the Commission, as this could allow the increasing involvement of more market participants and boost potential deployment, development and maintenance synergies across telecommunications and energy networks; stresses, however, that these proposals should be integrated into a streamlined regulatory framework in accordance with the principles laid down by the Commission;

36. Calls for cooperation in the development of smart grids at European, national and regional level; believes that smart grids offer an important opportunity to boost innovation, research and development, job creation and the competitiveness of European industry at local and regional level, in particular with regard to SMEs;

37. Calls on regions to network and share benefits, knowledge and best practices, and to cooperate in terms of cost benefit analyses on smart energy systems within the territorial cooperation objective of the ESI Funds; calls on the Commission to establish a transnational network for regions with smart energy systems; invites cross-border regions to use the legal instrument of European Grouping of Territorial Cooperation to jointly establish and manage services of general economic interest in the field of renewable energy and energy savings and smart grid infrastructure in such a network;

38. Underlines the importance of initiatives such as the Covenant of Mayors, which is the mainstream European movement involving local and regional authorities in the fight against climate change and which is based on a voluntary commitment by signatories to meet and exceed the EU objective of a 20 % reduction in CO2
through increased energy efficiency and the development of renewable energy sources, which endorse and support the efforts deployed by local authorities in the implementation of sustainable energy policies; stresses that local governments play a crucial role in mitigating the effects of climate change, in particular considering that 80 % of energy consumption and CO2
emissions is associated with urban activity;

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39. Instructs its President to forward this resolution to the Council, Commission and the Committee of the Regions.